42. Transition to IFRS

Transcription

1 42. Transition to IFRS Transition to IFRS has not materially affected the reported financial position, financial performance and cash flows. General fund Revaluation Donated asset Government Other Total reserve reserve grant reserve reserves Taxpayers equity at 31 March 2009 under UK GAAP: (2,790) 5, ,196 Adjustments for IFRS changes: 0 Private finance initiative Leases Others (specify) 1,483 (1,483) Adjustments for: Impairments recognised on transition UK GAAP errors Taxpayers equity at 1 April 2009 under IFRS: (1,307) 4, ,196 Other adjustments are for impairment treatment under IFRS and adjustment of negative revaluation reserve balances. (-336k negative revaluation reserve adjustments for community health centres, 761k impairment treatment in respect of Rawmarsh, Swallownest and Dinnington, 1058k outlying facilities at Doncaster Gate Hospital) 000 Net Operating Cost for 2008/09 under UK GAAP 392,345 Adjustments for: Private finance initiative 0 Leases 0 Others (specify) (578) Net Operating Cost for 2008/09 under IFRS 391,767 The UK GAAP 2008/09 cash flow statement included net movements in liquid resources of 35,000. This net movement is included in the bottom line cash and cash equivalents figure in the 2009/10 statement of cash flows under IFRS. * Other adjustments are for 574,000 impairments and 4,000 change in cost of capital. Page 49

2 Note 41. Pooled Budgets (continued) There is a pooled budget for Learning Disabilities Services with Rotherham Metropolitan Borough Council acting as host for this budget. Learning Disabilities Objectives of the services in 2007/08; 1) To improve the health and well being of people with learning disabilities. 2) To minimise the social exclusion experienced by people with learning disabilities 3) To promote the independence of people with learning disabilities. 4) To involve users of the Services and their carers in planning the Services and on an individual basis and at a strategic level. 5) To make and improve the effective use of current resources available to facilitate and deliver the Services. The lead partners strategic objectives which are linked to the Social Care Outcomes Framework were reviewed for : 1) To reduce the problem of crime and antisocial behaviour and make Rotherham's Neighbourhoods safer 2) To promote health and reduce health inequalities by enabling wellbeing and strengthening partnerships 3) Strengthen Neighbourhood Management arrangements through improving partnership involvement in a way which contributes to improve satisfaction with people's neighbourhood as a place to live by ) Deliver quality, innovation, efficient, value for money services to our customers through commissioning by the year ) Help build Sustainable Communities and unique places to live through targeted action as part of a sub-regional approach 6) To enable Independent Living in a way which contributes to increasing the number of people who are helped to live at home 7) Deliver services so that all adults have equality of opportunity, so that they can achieve their full potential which will contribute to the Council achieving Level 5 of the Local Government Equality Standard by the year Pooled budget memorandum account for period 1 April 2009 to 31 March / /09 Gross Funding Total Staff Other Total Staff Other Rotherham PCT 3,610,950 2,769, ,479 9,965,337 5,704,541 4,260,796 Rotherham MBC 27,861,471 6,699,454 21,162,017 16,458,994 6,085,057 10,373,937 Total Funding 31,472,421 9,468,925 22,003,496 26,424,331 11,789,598 14,634,733 Expenditure Objective 1 7,544, ,509 6,803,000 5,893,733 2,432,237 3,461,496 Objective 2 10,040,560 2,465,790 7,574,770 8,301,473 4,050,024 4,251,449 Objective 3 1,121, , ,588 1,065, , ,304 Objective 4 3,246,763 2,484, ,657 3,217,186 2,343, ,734 Objective 5 2,955, ,317 2,561,087 2,475, ,250 2,075,810 Objective 6 4,076,817 1,154,143 2,922,674 3,541,028 1,124,914 2,416,114 Objective 7 1,492, , ,288 1,322, , ,828 SYHA Hostels overspend 405, , Total Expenditure 30,883,085 8,759,515 22,123,570 25,816,942 11,801,207 14,015,735 Net Underspend -589, ,389 Rotherham MBC's share of the underspend of 589,336. Rotherham PCT committed to an agreement that any underspends in 09/10 would be used to fund South Yorkshire Housing Association's overspends within the Pooled Budget. Page 48

3 Note 41. Pooled Budgets The PCT operates a pooled budget for the provision of an Integrated Community Equipment Store with Rotherham Metropolitan Borough Council. The PCT acts as host for this budget. Provision of an Integrated Community Equipment Store The partnership agreement aims to provide an Integrated Local Community Equipment Service for the people of Rotherham. Outcomes are: - Provision of an integrated service. - Increase in the number of people benefiting from the provision of equipment by fifty percent. - Increase in the range and type of equipment available. - Greater involvement of service users in the running of the service. Pooled budget memorandum account for period 1 April 2009 to 31 March / /09 Gross Funding Total Staff Other Total Staff Other Rotherham PCT 959, , , , , ,589 Rotherham MBC 428,961 38, , ,797 37, ,082 Total Funding 1,388, ,075 1,078,432 1,362, ,373 1,060,671 Expenditure Objective 1 1,591, ,812 1,227,646 1,523, ,242 1,193,860 Total Expenditure 1,591, ,812 1,227,646 1,523, ,242 1,193,860 Net Overspend 202, ,058 The overspend has been separately identified and contained within each partner's own contribution. The amount of overspend incurred by Rotherham PCT and reported as PCT expenditure is 202,951 Page 46

4 Note 41. Pooled Budgets (Continued) There is a pooled budget for Intermediate Care services with Rotherham Metropolitan Borough Council acting as host for this budget. Intermediate Care Scheme Services designed to facilitate an early discharge from hospital for individuals who would otherwise undergo assessment and low key rehabilitation within a hospital. Objectives of the schemes; To assist in the prevention of avoidable admissions to acute hospital care. To assist in the prevention of inappropriate admissions to long-term residential and nursing care. To promote the practice of multi agency teams within the Intermediate Care service to provide a holistic assessment process to assist in timely and appropriate transfers of care. Pooled budget memorandum account for period 1 April 2009 to 31 March / /09 Gross Funding Total Staff Other Total Staff Other Rotherham PCT 1,385,095 1,053, ,803 1,361, , ,088 Rotherham MBC 1,847,656 1,540, ,188 1,777,091 1,432, ,992 Total Funding 3,232,751 2,593, ,991 3,139,033 2,385, ,080 Total Expenditure 3,125,343 2,486, ,991 2,768,794 2,188, ,110 Net Underspend -107, ,239 The Partnership Agreement states that utilisation of under/over spends is discussed including any carry over to the following year. The amount of underspend incurred by Rotherham PCT is 46,185. Page 47

5 38. Movements in working capital 2009/ / (Increase)/decrease in trade and other receivables (1,421) (1,605) (Increase)/decrease in inventories 6 (30) Increase/(decrease) in trade and other payables (394) 2,191 (Increase)/decrease in other current assets 0 0 Increase/(decrease) in other current liabilities 38 0 Total (1,771) Other cashflow adjustments 2009/ / Depreciation 1,501 1,166 Amortisation 0 0 Impairments and reversals 558 1,254 Cost of Capital Charge Transfer from donated asset reserve 0 0 Transfer from government grant reserve 0 0 Non-cash movements in provisions Release of PFI deferred credits 0 0 Net foreign exchange gain/(losses) 0 0 Total 2,228 2, Cashflow relating to exceptional items The PCT has no cash flows relating to exceptional items. Page 45

6 34. Third party assets The PCT held 0 cash and cash equivalents at 31 March 2010 on behalf of patients ( 0 at 31 March 2009). 35. Intra-Government Balances Current Non-current Current Non-current receivables receivables payables payables 000s 000s 000s 000s Balances with other Central Government Bodies Balances with Local Authorities 3, ,756 0 Balances with NHS Trusts and Foundation Trusts ,857 0 Balances with Public Corporations and Trading Funds Total Intra-Government balances 5, ,264 0 Balances with bodies external to government 2, ,150 0 At 31 March , ,414 0 Balances with other Central Government Bodies ,988 0 Balances with Local Authorities 2, ,196 0 Balances with NHS Trusts and Foundation Trusts ,021 0 Balances with Public Corporations and Trading Funds Total Intra-Government balances 4, ,205 0 Balances with bodies external to government 1, ,756 0 At 31 March , , Losses and Special Payments The total number of losses cases in 2009/10 was 36, involving a total loss of 28,689 (2008/09 46 cases and 10,826). The total number of special payments in 2009/10 was 12, involving a total of 9,980 (2008/09 21 cases and 53,993). 37. Events after the reporting period There are no events after the reporting period having a material effect on the accounts. Page 44

7 Note 33 Related Party Transactions (contd) Receipts from Related Party Payments to Related Party Amounts due from Related Party Amounts owed to Related Party Dr Collinson Dr Brynes 0 1, Dr Burns 0 1, Dr Kitlowski 0 2, Dr Tooth 0 1, The Rotherham NHS Foundation Trust , ,114 Sheffield Teaching Hospitals NHS Foundation Trust , Rotherham Doncaster and South Humber Mental Health NHS Found , Doncaster and Bassetlaw Hospitals NHS Foundation Trust 0 12, Yorkshire Ambulance Service NHS Trust 0 6, Sheffield Children's NHS Foundation Trust 1 4, Barnsley PCT 1,264 34, NHS Pension Scheme 0 7, Rotherham Metropolitan Borough Council ,516 3,420 1,756 HM Revenue and Customs (PAYE) 0 6, National Insurance Fund 0 5, In regard to outstanding balances for both payables and receivables the PCT's terms are 30 days. These values are not secured and no guarantees are given or received but amounts are to be settled in cash. None of the above are classified as bad or doubtful debts in the PCT's accounts. Page 43

8 33. Related party transactions Rotherham Primary Care Trust is a body corporate established by order of the Secretary of State for Health. The Board at its meeting in July 2008 determined that the PCT be called "NHS Rotherham" to identify with its role of leader of the NHS in Rotherham. Drs Brynes, Burns, Tooth and Kitlowski sit on the PCT's Professional Executive and Dr Collinson is a Board member as Chairman of the Professional Executive. The transactions with the practices which they are a partner for the financial year 2009/10 are disclosed within the table on page 43. Mike Foster member of the Professional Executive, is reimbursed by the Dental Practices Board as a dental practitioner. Mark Hamstead member of the Professional Executive is reimbursed for pharmacy transactions as notified by the NHS Business Services Authority-Prescription Pricing Authority. Dr P Macfarlane Consultant Peadiatrician and Mr C Eades are both employed by Rotherham Foundation Trust and are members of the Professional Executive. The Department of Health is regarded as a related party. During the year Rotherham Primary Care Trust has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent department. The transactions with these entities listed below are disclosed within the table on page 43. The Rotherham NHS Foundation Trust Sheffield Teaching Hospitals NHS Foundation Trust Rotherham Doncaster and South Humber Mental Health NHS Foundation Trust Doncaster and Bassetlaw Hospitals NHS Foundation Trust Yorkshire Ambulance Service NHS Trust Sheffield Children's NHS Foundation Trust Barnsley PCT NHS Pension Scheme In addition, the Primary Care Trust has had a significant number of material transactions with other Government Departments and other central and local Government bodies. The transactions with these entities listed below are disclosed within the table on page 43. Rotherham Metropolitan Borough Council HM Revenue and Customs (PAYE) National Insurance Fund Page 42

9 29. NHS LIFT Investments Rotherham PCT did not have any LIFT investments in 2009/10 or 2008/ Other financial assets Rotherham PCT does not have any Other Financial Assets. 31. Other current assets Rotherham PCT does not have any Other Current Assets. 32. Cash and Cash Equivalents 31 March March Balance at 1 April 42 7 Net change in year (32) 35 Balance at 31 March Made up of Cash with Office of HM Paymaster General/GBS 5 36 Commercial banks and cash in hand 5 6 Current investments 0 0 Cash and cash equivalents as in statement of financial position Bank overdraft - Office of HM Paymaster General/GBS 0 0 Bank overdraft - Comercial banks 0 0 Cash and cash equivalents as in statement of cash flows Patients' money held by the PCT, not included above 0 0 Page 41

10 28.1 Financial Assets At fair value through profit and loss Loans and receivables Available for sale Total Embedded derivatives Receivables - NHS 0 1, ,796 Receivables - non-nhs 0 4, ,803 Cash at bank and in hand Other financial assets Total at 31 March , ,609 Embedded derivatives Receivables - NHS 0 1, ,606 Receivables - non-nhs 0 3, ,809 Cash at bank and in hand Other financial assets Total at 31 March , , Financial Liabilities At fair value Other Total through profit and loss Embedded derivatives NHS payables 0 3,505 3,505 Non-NHS payables 0 17,723 17,723 Other borrowings PFI & finance lease obligations Other financial liabilities Total at 31 March ,295 21,295 Embedded derivatives NHS payables 0 2,520 2,520 Non-NHS payables 0 17,641 17,641 Other borrowings PFI & finance lease obligations Other financial liabilities Total at 31 March ,180 20,180 The values recorded above for Financial Assets and Liabilities are current financial values as at 31st March Page 40

11 28. Financial Instruments Financial risk management Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking its activities. As the cash requirements of the PCT are met through Parliamentary Funding, financial instruments play a more limited role in creating risk that would apply to a nonpublic sector body of a similar size. The majority of financial instruments relate to contracts for non-financial items in line with the PCT s expected purchase and usage requirements and the PCT is therefore exposed to little credit, liquidity or market risk. Currency risk The PCT is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and Sterling based. The PCT has no overseas operations. The PCT therefore has low exposure to currency rate fluctuations. Interest rate risk PCTs are not permitted to borrow. The PCT therefore has low exposure to interest- rate fluctuations Credit Risk Because the majority of the PCT s income comes from funds voted by Parliament the PCT has low exposure to credit risk. Liquidity Risk The PCT is required to operate within limits set by the Secretary of State for the financial year and draws down funds from the Department of Health as the requirement arises. The PCT is not, therefore, exposed to significant liquidity risks. Page 39

12 25. Finance lease obligations Rotherham PCT has not entered into any contract to lease an asset under a finance lease in 2009/10 or 2008/ Finance lease receivables (i.e. as lessor) Rotherham PCT has not entered into any contract to lease an asset under a finance lease in 2009/10 or 2008/ PFI and NHS LIFT Schemes The PCT has not committed to make any payments in respect of PFI schemes in 2009/10 or 2008/09. Page 38

13 22. Contingencies 31 March March Contingent liabilities (41) (31) Contingent assets Contingencies are as follows: Legal claims notified by the NHS Litigation Authority where it is not probable that the liability will materialise, the amount of 20,750 is included above. A provision within the accounts of the probable liability of 48,250 has been included at note 21. The percentage probability advised by the NHS Litigation Authority has been used to calculate likely future costs and both provision and contingent liability arise from the same legal claims. A further 20,245 was included as a contingent liability in repect of a retrospective continuing care patient where a provision had also been included for the same patient for the amount of 70% of the probable costs. In addition Free Nursing Care reviews are to take place in 2010/11 as a result of new rules introduced in October This may result in additional costs to the PCT however the timing and amounts cannot be reasonably estimated at this time. A contingent asset has been recognised in the accounts due to two legal charges being applied to properties owned by the South Yorkshire Housing Association by the NHS in Rotherham in 1999 that may result in the recognition of income dependant on future events. These properties are Cranworth Close, 356,000 and Wath Hostel, 245,000. It is intended to transfer this legal charge to RMBC by the 31st March 2011 following the transfer of Learning Disability Social Care funding and commissioning from the NHS to Local Government on 1st April Capital Commitments Contracted capital commitments at 31 March not otherwise included in these financial statements: 31 March March Property, plant and equipment Intangible assets 0 0 Total Other financial liabilities Financial liabilities carried at fair value through profit and loss Current Non-current 31 March March March March Embedded Derivatives at Fair Value through OCS Other Financial Liabilities at Fair Value through Profit and Loss Amortised Cost Total Page 37

14 21. Provisions Current Non-current 31 March March March March Pensions relating to former directors Pensions relating to other staff Legal claims Restructurings Continuing Care Agenda for Change Equal Pay Other (specify) Total Pensions relating to former directors Pensions relating to other staff Legal claims Restructurings Other Total At 1 April , ,074 Arising during the year Utilised during the year 0 (878) (58) 0 0 (936) Reversed unused 0 (56) (5) 0 0 (61) Unwinding of discount Transferred in-year 0 (13) (13) At 1 April Arising during the year Utilised during the year 0 (14) (14) 0 0 (28) Reversed unused 0 (6) (10) 0 0 (16) Unwinding of discount Transferred in-year At 31 March Expected timing of cash flows: In the remainder of the spending review period to: 31 March Between 1 April 2011 and 31 March Between 1 April 2016 and 31 March Thereafter Both Legal and Pension provisions are relatively certain in respect of amounts and timings of payments and there have been no major assumptions or changes made concerning future events. The amounts included for Legal Claims is based on the probability of the costs materialising as advised by the NHS Litigation Authority, the remaining liability arising from the same claims but which is not likely to materialise has been treated as a contingent liability and is disclosed within note 22. The amount included in Other is based on a Retrospective Continuing Care patient. The remaining liability in respect of the same patient but which is not likely to materialise has been treated as a contingent liability and is disclosed within note is included in the provisions of the NHS Litigation Authority at 31/3/2010 in respect of clinical negligence liabilities of the PCT (31/03/ ,126). Page 36

15 18. Trade and other payables Current Non-current 31 March March March March NHS payables - revenue 3,505 2, FHS Payables 10,571 11, Non-NHS trade payables - revenue 973 1, Non-NHS trade payables - capital Tax and Social Security Costs Other Payables Accruals & Deferred Income 6,313 5, Total 21,414 21, There are no liabilities in respect of payments due in future years under arrangements to buy out the liability for early retirements over 5 instalments; and there are no outstanding pensions contributions at 31 March Borrowings Current Non-current 31 March March March March Bank overdraft - Office of HM Paymaster General / Government Banking Service Bank overdraft - Commercial banks Finance lease liabilities PFI liabilities: Main liability Lifecycle replacement received in advance LIFT liabilities: Main liability Lifecycle replacement received in advance Other (describe) Total Other liabilities Current Non-current 31 March March March March PFI/LIFT deferred credit Lease incentives Other [specify] Total Page 35

16 16.1 Inventories 31 March March Drugs 0 0 Consumables 0 0 Loan equipment 0 0 Other Total Inventories recognised in expenses 2009/ / Inventories recognised as an expense in the period 6 (30) Write-down of expenses (including losses) 0 0 Reversal of write-down previously taken to OCS 0 0 Total 6 (30) 17.1 Trade and other receivables Current Non-current 31 March March March March NHS receivables - revenue 1,796 1, Non-NHS receivables - revenue 4,426 1, Provision for the impairment of receivables (8) (6) 0 0 VAT Prepayments & other accrued income 1,019 2, Other Receivables Total 7,442 6, Receivables past their due date but not impaired 31 March March By up to three months 1, By three to six months By more than six months Total 1, Provision for impairment of receivables 31 March March Balance at 1 April (6) (6) Amount written off during the year 0 0 Amount recovered during the year 0 0 (Increase)/decrease in receivables impaired (2) 0 Balance at 31 March (8) (6) Provision for impairment of receivables includes 7 invoices and the amounts are carried at fair value. Page 34

17 14. Impairments There was a reduction in the value of land and buildings due to market conditions. The valuation is on the basis of continuation of use. The total amount of impairments is 1,394k (Land 146k and Buildings 1,248k) of which 558k is charged to Operating Costs. 15. Non-current assets held for sale Land Buildings, excl. dwellings Dwellings Other property, plant and equipment Intangible assets Total Balance brought forward 1 April , ,375 Plus assets classified as held for sale in the year Less assets sold in the year (1,060) (299) (1,359) Less impairment of assets held for sale Plus reversal of impairment of assets held for sale Less assets no longer classified as held for sale, for reasons other than disposal by sale 0 (16) (16) Balance carried forward 31 March Balance brought forward 1 April Plus assets classified as held for sale in the year 1, ,375 Less assets sold in the year Less impairment of assets held for sale Plus reversal of impairment of assets held for sale Less assets no longer classified as held for sale, for reasons other than disposal by sale Balance carried forward 31 March , ,375 Doncaster Gate Hospital - Declared surplus by Head of Estates therefore was classified as for sale. Assets held for sale was originally held at the value of 1,375k, the NBV at the point of sale being 1,359k, sales proceeds being 1,315 therefore a loss of 44k was established. Page 33

18 13.1 Intangible non-current assets 2008/09 Software purchased Software internally generated Licences & trademarks Patents Development expenditure Cost or valuation: At 1 April Additions - purchased Additions - internally generated Additions - donated Additions - government granted Reclassifications Reclassified as held for sale Disposals other than by sale Revaluation & indexation gains Impairments Reversal of impairments In-year transfers to/from NHS bodies At 31 March Amortisation At 1 April Charged During the Year Impairments Reversal of Impairments Reclassifications Revaluation/Indexation gains Reclassified as Held for Sale Disposals other than for sale In-year transfers to NHS bodies At 31 March Net book value at 31 March Net book value at 31 March 2009 comprises: Purchased Donated Government Granted Total at 31 March Total Page 32

19 13.1 Intangible non-current assets 2009/10 Software purchased Software internally generated Licences & trademarks Patents Development expenditure Cost or valuation: At 1 April Additions - purchased Additions - internally generated Additions - donated Additions - government granted Reclassifications Reclassified as held for sale Disposals other than by sale Revaluation & indexation gains Impairments Reversal of impairments In-year transfers to/from NHS bodies At 31 March Amortisation At 1 April Charged in-year Reclassifications Reclassified as held for sale Disposals other than by sale Revaluation & indexation gains Impairments Reversal of Impairments In-year transfers to NHS bodies At 31 March NBV at 31 March Net book value at 31 March 2010 comprises: Purchased Donated Government Granted Total at 31 March Total Page 31

20 12 (cont). Property, plant and equipment The Department of Health has indicated that for NHS assets it requires the following assumption to be applied for operational assets and can confirm that approach has been followed in the valuation of assets. "The Market Value on the assumption that the property is sold as part of the continuing enterprise in occupation" (effectively EUV). A revaluation was carried out as at 31 March 2010 by District Valuer, Gary Johnson BSc(Hons) MRICS, on a modern equivalent asset basis. This resulted in a reduction in net book value of 1,047,661. Reclassification held for sale asset is Doncaster Gate Hospital. This asset was sold for 1,315k. Wheatey Road Clinic is currently a temporarily idle asset with a net book value of 85,000. The Economic lives of Non - Current assets held by the PCT are shown below. Min Life Max Life Buildings Plant and Machinery 5 15 Transport Equipment 7 7 Information Technology 5 8 Furniture and Fittings 5 15 Page 30

21 12.1 Property, plant and equipment 2008/09 Land Buildings excluding dwellings Dwellings Assets under construction and payments on account Plant & machinery Transport equipment Information technology Furniture & fittings Cost or valuation: At 1 April ,055 11, , ,852 Additions - purchased , ,760 Additions - donated Additions - government granted Reclassifications (617) (28) Reclassified as held for sale (1,060) (315) (1,375) Disposals other than by sale 0 (1,478) 0 0 (62) 0 0 (23) (1,563) Revaluation & indexation gains ,199 Impairments (796) (1,969) (2,765) Reversals of impairments In-year transfers to/from NHS bodies At 31 March ,993 10, , ,244 1,153 22,108 Depreciation At 1 April , ,470 Reclassifications Reclassifications as Held for Sale Disposals other than for sale 0 (1,478) 0 0 (62) 0 0 (21) (1,561) Upward revaluation/positive indexation Impairments ,254 Reversal of Impairments Charged During the Year ,166 Transfers to NHS Bodies At 31 March (374) , ,355 Net book value 3,411 10, , ,753 Purchased 3,411 10, , ,753 Donated Government Granted Total at 31 March ,411 10, , , Asset financing: Owned 3,411 10, , ,753 Held on finance lease On-SOFP PFI contracts PFI residual: interests ,411 10, , ,753 Total Page 29

22 12.1 Property, plant and equipment 2009/10 Land Buildings excluding dwellings Dwellings Assets under construction and payments on account Plant & machinery Transport equipment Information technology Furniture & fittings Cost or valuation: At 1 April ,411 10, , ,244 1,153 21,900 Additions Purchased ,367 Additions Donated Additions Government Granted Reclassifications 146 (82) 0 (64) Reclassifications as Held for Sale Disposals other than for sale Upward revaluation/positive indexation Impairments/negative indexation (129) (707) (836) Reversal of Impairments Transfers (to)/from NHS Bodies At 31 March ,692 10, , ,793 1,154 22,778 Depreciation At 1 April , ,147 Reclassifications Reclassifications as Held for Sale 0 (16) (16) Disposals other than for sale Upward revaluation/positive indexation Impairments Reversal of Impairments Charged During the Year ,501 Transfers to NHS Bodies At 31 March , , ,190 Net book value at 31 March ,675 9, , ,588 Purchased 3,675 9, , ,588 Donated Government Granted Total at 31 March ,675 9, , , Asset financing: Owned 3,675 9, , ,588 Held on finance lease On-SOFP PFI contracts PFI residual: interests Total 3,675 9, , ,588 Total 12.3 Revaluation Reserve Balance for Property, Plant & Equipment Land Buildings Equipment Other Total 000's 000's 000's 000's 000's At 1 April ,166 2, ,561 Movements (specify) (1,019) (1,305) 0 0 (2,324) At 31 March , ,237 Page 28

23 8. Better Payment Practice Code 8.1 Measure of compliance 2009/ / / /09 Number 000 Number 000 Non-NHS Payables Total Non-NHS Trade Invoices Paid in the Year 29,269 87,340 26,925 81,915 Total Non-NHS Trade Invoices Paid Within Target 28,862 86,971 26,223 81,439 Percentage of Non-NHS Trade Invoices Paid Within Target 98.61% 99.58% 97.39% 99.42% NHS Payables Total NHS Trade Invoices Paid in the Year 3, ,320 2, ,664 Total NHS Trade Invoices Paid Within Target 3, ,247 2, ,015 Percentage of NHS Trade Invoices Paid Within Target 98.85% 99.97% 97.55% 99.72% The Better Payment Practice Code requires the PCT to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later. 8.2 The Late Payment of Commercial Debts (Interest) Act / / Amounts included in finance costs from claims made under this legislation 0 0 Compensation paid to cover debt recovery costs under this legislation 0 0 Total Investment Income The PCT had no investment income in 2009/10 or 2008/ Other Gains and Losses 2009/ / Gain/(loss) on disposal of property, plant and equipment (44) (2) Gain/(loss) on disposal of intangible assets 0 0 Gain/(loss) on disposal of financial assets 0 0 Gain/(loss) on foreign exchange 0 0 Change in fair value of financial assets carried at fair value through the OCS 0 0 Change in fair value of financial liabilities carried at fair value through the OCS 0 0 Recycling of gain/(loss) from equity on disposal of financial assets held for sale 0 0 Total (44) (2) 11. Finance Costs 2009/ / Interest Provisions - unwinding of discount 3 3 Interest on late payment of commercial debt 0 0 Other interest expense 0 0 Other finance costs 0 0 Total 3 3 Page 27

24 7.6 Management Costs Total Management Costs 2009/ / /09 (Restated) Management costs ( 000s) 11,133 10,288 7,868 Weighted population (number in units) 282, , ,972 Management Cost per weighted head of population ( per head) Commissioning Management Costs 2009/10 Management costs ( 000s) 7,241 Weighted population (number in units) 282,493 Management Cost per weighted head of population ( per head) PCT Provider Services Management Costs 2009/10 Management costs ( 000s) 3,892 Provider Services Income 53,497 The PCT measures its management costs according to the definitions provided by the Department of Health. Although the PCT has changed it's interpretation of the guidance in 2009/10, 2008/09 figures have been restated to account for this new interpretation. The Management Costs of the organisation are the resources expended as a direct consequence of the commissioning and delivery of healthcare services. The increase in Management Costs per head of weighted population has been driven by five main factors. Firstly, we have re-assessed the guidance which determines what should be categorised as a Management Cost. Secondly, Pay inflation of 2.4% and the impact of incremental pay increases on Agenda for Change contracts. Thirdly, we have invested in new community services as we have implemented NHS Rotherham s Better Health, Better Lives strategy. As a consequence of this investment in new and expanded front line services additional management capacity has been necessary in order to ensure successful delivery of these services in the areas of greatest need. Fourthly, as part of the Department of Health Transforming Community Services assurance process we have increased the managerial capacity of Rotherham Community Health Services to allow it to become an arm s length managed organisation. Finally, in order to implement our World Class Commissioning strategic plan it has been necessary to ensure we make the required investment in a highly skilled committed workforce to deliver progress against NHS Rotherham's 10 Key health outcomes, and the implementation of 29 transformational initiatives that improve health for the people of Rotherham. For example, Programme Leads, Procurement specialists, and IT specialists. The 2.4m movement between the Management Cost figure included in the 2008/09 Audited Accounts and the re-stated 2008/09 Management figure is as follows: 381k relates to a review of those posts excluded under Corporate functions. A further 170k relates to posts previously excluded under Public Health Specialists which are administrative costs and not linked to clinical disciplines. Following a review of the guidance these are now included in management costs. 1,042k of legal and professional fees have been included in the re-stated figure. These costs formed part of our Asset Improvement Scheme and relate primarily to the building of our Primary Care centre and GP Service centres. In 2008/09 we had omitted costs relating to some contracted out services i.e Estates, Organisational Development and IT consultancy. This amounted to 224k and following a review of the guidance are now included in management costs. Our contribution to the Yorkshire and Humber Collaborative and Specialised Commissioning Group was also excluded from the 2008/09 submission. Directives received from the Strategic Health Authority clarified the management cost guidance and indicated that PCT's should include all collaborative costs in management costs. The implication of the inclusion amounted to 194k. A review of posts within Rotherham Community Health Services concluded that some costs were excluded on the grounds that these were clinical posts. All of the excluded posts included a management element and therefore in the re-statement an apportionment of the cost has been applied between clinical and management. This has resulted in an increase to the Management cost element of 412k. Page 26

25 7.5 Pension costs Past and present employees are covered by the provisions of the NHS Pensions Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at The scheme is an unfunded, defined benefit scheme that covers NHS employers, General Practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS Body of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period. The scheme is subject to a full actuarial valuation every four years (until 2004, every five years) and an accounting valuation every year. An outline of these follows: a) Full actuarial (funding) valuation The purpose of this valuation is to assess the level of liability in respect of the benefits due under the scheme (taking into account its recent demographic experience), and to recommend the contribution rates to be paid by employers and scheme members. The last such valuation, which determined current contribution rates was undertaken as at 31 March 2004 and covered the period from 1 April 1999 to that date. The conclusion from the 2004 valuation was that the scheme had accumulated a notional deficit of 3.3 billion against the notional assets as at 31 March In order to defray the costs of benefits, employers pay contributions at 14% of pensionable pay and most employees had up to April 2008 paid 6%, with manual staff paying 5%. Following the full actuarial review by the Government Actuary undertaken as at 31 March 2004, and after consideration of changes to the NHS Pension Scheme taking effect from 1 April 2008, his valuation report recommended that employer contributions could continue at the existing rate of 14% of pensionable pay, from 1 April 2008, following the introduction of employee contributions on a tiered scale from 5% up to 8.5% of their pensionable pay depending on total earnings. On advice from the scheme actuary, scheme contributions may be varied from time to time to reflect changes in the scheme's liabilities. b) Accounting valuation A valuation of the scheme liability is carried out annually by the scheme actuary as at the end of the reporting period by updating the results of the full actuarial valuation. Between the full actuarial valuations at a two-year midpoint, a full and detailed member data-set is provided to the scheme actuary. At this point the assumptions regarding the composition of the scheme membership are updated to allow the scheme liability to be valued. The valuation of the scheme liability as at 31 March 2010, is based on detailed membership data as at 31 March 2008 (the latest midpoint) updated to 31 March 2010 with summary global member and accounting data. The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Resource Account, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office. c) Scheme provisions In the NHS Pension Scheme provided defined benefits, which are summarised below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the scheme or the specific conditions that must be met before these benefits can be obtained. Annual Pensions The scheme is a final salary scheme. Annual pensions are normally based on 1/80th for the 1995 section and of the best of the last 3 years pensionable pay for each year of service, and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme Regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service. With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HMRC rules. This new provision is known as "pension commutation". Pensions Indexation Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971, and are based on changes in retail prices in the twelve months ending 30 September in the previous calendar year. Lump Sum Allowance A lump sum is payable on retirement which is normally three times the annual pension payment. Ill-Health Retirement Early payment of a pension, with enhancement in certain circumstances, is available to members of the Scheme who are permanently incapable of fulfilling their duties or regular employment effectively through illness or infirmity. Death Benefits A death gratuity of twice their final year's pensionable pay for death in service, and five times their annual pension for death after retirement is payable. Additional Voluntary Contributions (AVCs) Members can purchase additional service in the NHS Scheme and contribute to money purchase AVC's run by the Scheme's approved providers or by the other Free Standing Additional Voluntary Contributions (FSAVC) providers. Transfer between Funds Scheme members have the option to transfer their pension between the NHS Pension Scheme and another scheme when they move into or out of NHS employment. Preserved Benefits Where a scheme member ceases NHS employment with more than two years service they can preserve their accrued NHS pension for payment when they reach retirement age. Compensation for Early Retirement Where a member of the Scheme is made redundant they may be entitled to early receipt of their pension plus enhancement, at the employer's cost. Page 25

26 7. Employee benefits and staff numbers 7.1 Employee benefits 2009/ /09 Total Permanently Employed Other Total Permanently Employed Other Salaries and wages 42,039 40,179 1,860 37,950 35,902 2,048 Social security costs 2,974 2, ,703 2,703 0 Employer contributions to NHS Pensions scheme 5,195 5, ,713 4,713 0 Other pension costs Other post-employment benefits Other employment benefits Termination benefits Total employee benefits 50,208 48,348 1,860 45,366 43,318 2,048 Recognised as: Commissioning employee benefits 9,719 7,014 Provider employee benefits 40,489 38,352 Employee benefits capitalised as part of assets 0 0 Total 50,208 45, Staff Numbers 2009/ /09 Total Permanently Employed Other Total Permanently Employed Other Number Number Number Number Number Number Medical and dental Ambulance staff Administration and estates Healthcare assistants & other support staff Nursing, midwifery & health visiting staff Nursing, midwifery & health visiting learners Scientific, therapeutic and technical staff Social Care staff Other Total staff numbers ,387 1, Staff Sickness absence 2009/10 Number Total FTE Days Lost 14,643 Total FTE Days Lost 14,643 Total FTE Staff Years Available 1,418 Average FTE Days Lost Note: No prior-year figure available as this note is a new requirement for 2009/10 The above figures have been converted to the "Cabinet Office" measurement base by applying a factor to covert from calendar year as directed by the Department of Health. These figures are drawn from Rotherham PCT's own sickness absence recording system. 7.4 Retirements due to ill-health 1 persons (2008/09: 3 persons) retired early on ill-health grounds. The total additional accrued pension liabilities in the year amounted to 468 (2008/09: 56,865). The cost of ill health retirements is borne by the NHS Business Services Authority, which administers the NHS Pension Scheme. Page 24

27 6. Operating Leases Significant leasing arrangements include: Oak House lease totaled 456,404 in 2009/10 ( 419, /09) which is determined by a lease agreement with Wm Morrison Supermarket PLC. The term of the lease is 15 years commencing November 2004 with 5 yearly rent reviews. Rotherham Primary Care Centre lease totalled 892,400 in 2009/10 ( 303, /09) which is determined by a lease agreement with Cortonwood Retail Park Limited. The term of the lease is 20 years commencing November 2008 with 5 yearly rent reviews. Rotherham Equipment and Wheelchair Service (REWS) lease totalled 120,835 in 2009/10 ( 111, /09) which is determined by a lease agreement with Ernest V Waddington Limited.The term of the lease is for 10 years commencing June 2004 with 5 yearly rent reviews. All the above leases conform to the following criteria: Ownership does not transfer to the lessee at the end of the lease term. The lessee is not given the option to purchase the asset at the end of the lease term at less than open market value. 6.1 PCT as lessee 2009/ / Payments recognised as an expense Minimum lease payments 1,660 1,222 Contingent rents 0 0 Sub-lease payments 0 0 Total 1, Payable: No later than one year 1,769 1,790 Between one and five years 6,369 6,360 After five years 16,676 18,299 Total 24,814 26,449 Rotherham PCT has entered into certain financial arrangements involving the use of GP Premises. The PCT has determined that those Operating Leases must be recognised, but, as there is no defined term in the arrangements entered into, it is not possible to analyse the arrangements over financial years. The financial value included in the Operating Cost Statement for 2009/10 is 1,327,000 (2008/09 1,312,000). 6.2 PCT as lessor Rotherham PCT is not classified as a lessor of any Operating Leases. Page 23

28 5.2 Analysis of operating expenditure by expenditure 2009/ /09 classification Purchase of Primary Health Care GMS / PMS/ APMS / PCTMS 35,546 33,867 Prescribing costs 41,908 40,513 Contractor led GDS & PDS 15,126 14,506 General Ophthalmic Services 2,064 2,017 New Pharmacy Contract 4,178 3,729 Non-GMS Services from GPs Total Primary Healthcare purchased 98,994 94,747 Purchase of Secondary Healthcare Learning Difficulties 11,614 11,036 Mental Illness 34,531 31,279 Maternity 13,596 11,120 General and Acute 189, ,320 Accident and emergency 11,556 8,413 Community Health Services 32,329 29,893 Other Contractual 16,608 15,463 Total Secondary Healthcare Purchased 309, ,524 Grant Funding Grants (revenue) to fund Capital Projects - GMS 1,660 1,397 Grants (revenue) to LAs to fund Capital Projects 4,250 0 Grants (revenue) to private sector to fund Capital Projects 0 0 Grants (revenue) to fund Capital Projects - Dental Grants (revenue) to fund Capital Projects - other 0 1,500 Total Healthcare Purchased by PCT 414, ,378 PCT self-provided secondary healthcare included above 38,167 38,689 Healthcare purchased from Foundation Trusts included above 204, ,421 Page 22

29 5. Operating Costs 5.1 Analysis of operating costs: 2009/ / Goods and Services from Other PCTs Healthcare 33,871 20,667 Non-Healthcare 0 0 Total 33,871 20,667 Goods and Services from Other NHS Bodies other than FTs Healthcare 9,405 9,009 Non-Healthcare 2,577 2,187 Total 11,982 11,196 Goods and Services from Foundation Trusts 204, ,421 Purchase of Healthcare from Non-NHS bodies 30,367 25,109 Expenditure on Drugs Action Teams 2,495 2,128 Non-GMS Services from GPs Contractor Led GDS & PDS (excluding employee benefits) 15,126 14,716 Chair, Non-executive Directors & PEC remuneration Consultancy Services Prescribing Costs 41,908 40,513 G/PMS, APMS and PCTMS (excluding employee benefits) 35,546 35,264 New Pharmacy Contract 4,178 3,729 General Ophthalmic Services 2,064 2,017 Supplies and Services - Clinical 4,755 4,428 Supplies and Services - General Establishment 2,656 2,465 Transport Premises 5,732 4,831 Impairments & Reversals of Property, plant and equipment 558 1,254 Impairments and Reversals of non-current assets held for sale 0 0 Depreciation 1,501 1,166 Cost of Capital Charge Impairment of Receivables 2 0 Audit Fees Other Auditors Remuneration 0 10 Clinical Negligence Costs Education and Training Other * 6,095 5,352 Total Operating costs charged to OCS (excluding employee benefits) 406, ,772 Employee Benefits Employee Benefits (excluding staff associated with PCTMS) 48,104 Employee Benefits associated with PCTMS 1,676 PCT Officer Board Members 428 Total Employee Benefits charged to OCS 50,208 45,366 Total Operating Costs 456, ,138 * Other Costs include GP MADEL costs of 1,215. Page 21